Real Estate Predictions 2019
Many are making real estate predictions in 2019. Last year, several experts predicted that new tax laws would play a significant role, creating a slowdown in the residential housing industry. As we now know, it has had little effect. Limitations on mortgage interest and real estate tax deductions are not the culprits. We can now shift the blame to rising interest rates and the continual rise of housing prices. These upward trends continue to put home-ownership out of reach for many.
So, what are the real estate predictions for 2019 for the housing market? Hear from the Experts.
Economic uncertainty introduced by global trade tensions, stock exchange volatility and also isn’t helping to make real estate predictions for 2019 less exciting. Within this atmosphere, potential house buyers could be reluctant to create a large purchase such as a house. However, we could take another approach. People are somewhat used to uncertainty. They will continue to move forward with their purchase despite current conditions.
It’s still far too early to be sure if this recent decline in real estate is a temporary lull or perhaps a significant pullback. Time can only tell us.Within their forecasts for 2019, property experts anticipate the housing industry slowing a bit, although not wholly stalling, with prices and home loan rates dictating the pace. We can hope not to experience large amounts of turbulence.“If home loan rates trend sideways the coming year, as anticipated, and keeping residential cost appreciation at bay, improving affordability should breathe some life into the housing industry,” stated Doug G. Duncan, chief economist at Fannie Mae. So what are housing experts forecasting for 2019? Let’s find out.
Zillow Real Estate Predictions for 2019
Based on Zillow, rising interest rates are encouraging homeowners to stay in their homes and discouraging potential buyers.“Rising interest rates will create the scene for the housing industry in 2019,” stated Aaron Terrazas, senior economist at Zillow. “They will affect everybody, driving up prices for potential home buyers and making more demand in rentals. Even current homeowners could begin to feel locked to their home loan rates.”Zillow anticipates home loan rates to be about 5.8 percent, and residential home values will increase to 3.79 % in 2019. The experts at Zillow are predominately following suite of other expert analysis.
Realtor.com Real Estate Predictions for 2019
Due to price increases as well as mortgage rate increases we should see affordability diminishing. Realtor.com forecasts home sales to drop a couple of points. Buyers searching for top-end luxury will be happy to have a few more options. Realtor.com expects slow price growth, rising just 2.2 percent in 2019. These predictions echos the sentiments of what many other experts predict.“Inventory will continuously increase the coming year. This is unless of course, there’s a significant transfer of the economic trajectory. We don’t expect a buyer’s market is coming over the following five years,” stated Danielle Hale, chief economist for Realtor.com. Realtor.com has home loan rates averaging 5.3 % in next season and reaching 5.5 percent through the finish of 2019. This will make the typical home purchase 8 percent more costly per month than 2018. So again, not the best news.
Redfin Real Estate Predictions for 2019
Redfin sees the housing industry cooling within the first half of 2019. Price growth will settle around 3 % after reliably exceeding 5 percent since the beginning of 2015.“There’s a substantial amount of uncertainty around our price forecast,” stated Daryl Fairweather, Redfin chief economist. “There is a genuine chance price could fall below 2018 levels, setting up negative growth the very first time since 2011.”Metro areas like San Fransico, La, Denver, and Portland, which saw substantial price growth in the first half of 2018, will have a significant slowdown in price growth during the second part of the year 2019. Predictions from Redfin include the home-ownership rate will grow more quickly in 2019. Speculators and investors take an exit. Fairweather expects rates to increase to 5.5 percent through the conclusion of 2019.
NAR (National Association of Realtors)
Nar expects home sales to flatten a bit and residential prices to continue its upward projection, though at a slower pace.“The forecast for home sales can be boring – meaning stable,” stated Lawrence Yun, NAR chief economist expects sales to improve 1 % to around 5.4 million and also the median home cost to increase by 3.1 % to about $266,800 in 2019, and then $274,000 in 2020.“Home-price appreciation will slow down,” Yun stated. “The times of easy gains are coming to a finish, but prices will continuously rise.”Inventory remains an issue.”All indications are we have a housing shortage,” Yun stated. “If you take a look at population growth and job growth, it’s obvious that we’re not producing enough houses.”
Greg McBride is a chief financial analyst for Bankrate.com. He predicts the 30-year fixed interest rate will pass 5.25 % before going into a downward slope later in the year, ending up around the 4.35 % mark.Because the Fed trims its balance sheet and pushes up short-term rates of interest, HELOCs (home equity credit line) many individuals tied to the prime rate will be affected. The prime interest rate emulates the Federal Reserve benchmark interest rate.“With every rate hike, the minimum payment on the $30,000 home-equity line increases by $6,” McBride stated. “I expect the Federal Reserve to raise rates twice next year, bringing the increase in minimum payments to $12.50 per month by year’s end.”
Mortgage Bankers Association
The Mortgage Bankers Association expects a moderate increase in home mortgage origination’s, with refinance volume continuing the slope. It anticipates the 30-year fixed-rate mortgage will even out at 5.1 %.MBA economists Michael Fratantoni and Joel Kan wrote: “The lack of affordability and the decreased supply of homes continues to be ongoing challenges for the housing market.” “Even with the probable slow down in economic growth, we expect strong demands will continue for housing. Mortgage rates should be stable, we should see an increase in wage growth and home prices will level, providing favorable conditions for growth in the home purchase market,” according to Michael Fratantoni and Joel KanNational
Association of Home Builders
Following a strong start this past year, at the end of 2018 home-builder confidence fell to the lowest level since 2015.
Some of the big home builders downgraded their sales or orders forecasts for 2019.“The market has slowed,” stated Robert Dietz, chief economist for that National Association of Home Builders. “We’ve revised our forecast down.”Builders face significant challenges due to the “five Ls” – labor, lots, laws, lending, and lumber. A labor shortage, insufficient build-able lots, burdensome rules, strict lending and tariffs on supplies, for example, lumber have increased their costs, states Dietz.New-home sales are going to be somewhere around 628,000, just like in 2018 the National Association of home builders predicts.
Single family construction including for-sale and not-for-sale homes, may increase nearly 2 percent from 2018 to about 900,000 units. According to the census, that’s 200,000 to 300,000 less than the marketplace could absorb. This is also well beneath the average quantity of starts before the housing crash of 2008. To give you an example, from 2000 to 2003, the average was about 1.3 million. Builders took lots of heat because of not building enough residential homes or building mainly luxury homes. But Dietz stated there’d been an uptick in townhouse construction, a less expensive single-family option.Demand has been shifting away from higher-end, higher-priced homes the last three years or so to less expensive, more entry-level homes, ” he stated. “Our surveys have shown that first time home buyers now take up close to 30% of new home construction (closer to historical norms) as opposed to the usual less than 20%.”
In Conclusion, for 2019 we may expect to see interest rates rise a bit but may retract somewhat towards the end of the year. We should see moderate gains in housing prices while residential home sale diminishes a bit. More would be sellers may decide to take a breather and wait until 2020 to list their home. Potential buyers may pay a bit more on their monthly mortgage payments, though I believe this will not deter them as long as they can access funds. We can expect fewer new homes if developer predictions are correct.
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